Member states support tough stance on French economy

Finance ministers from the European Union's 27 member states today (21 June) backed a European Commission report calling for France to overhaul its pension system and introduce far-reaching economic reforms.

The ministers, meeting in Luxembourg, endorsed the Commission's recommendations, which were issued last month, despite resistance from the French government.

The Commission's recommendations are part of the EU's new tougher surveillance of countries' budget plans  but they have to be approved by finance ministers from all member states before becoming official.

As part of today's endorsements, Italy, Latvia, Lithuania, Hungary and Romania will leave the EU's excessive deficit procedure because they have managed to reduce their deficits to below 3% of gross domestic product (GDP).

The Commission's advice for France has caused some consternation in Paris, with François Hollande, France's president, saying that it should be the responsibility of his government to decide on the type and pace of reform.

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"The degree of prescription by the Commission was somewhat criticised but we did it with good reason, because we want to give examples to member states", said Olli Rehn, the European commissioner for economic and monetary affairs and the euro, who attended today's meeting of finance ministers.

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"It' is important that the objective is met, while member states will choose the ways and means of meeting that objective", he added.

In a joint statement after their meeting, the finance ministers said that France's pension system would continue to face large deficits and that new policy measures are urgently needed to remedy the situation.

They also said that France needed to reform its tax system and reduce public spending.